Growing interest rates and what they mean for those looking to lease
As you probably already know, interest rates are continuing to surge. This is all part of the country’s attempt to tackle inflation, in hopes that people will put off any purchasing plans for now. This then forces suppliers to lower their prices. Therefore, we are now seeing the price of borrowing rising from historic lows.
How does this impact leasing?
Unfortunately, the asset finance sector is not exempt from the seemingly ever-increasing interest rates. This is a matter very much out of our control, as when the Bank of England increase their rates, we inevitably see our funders do the same.
Currently, the Bank of England have increased their interest rates six times since December 2021 and most recently two weeks ago. On the 4th of August 2022 the Bank of England made their biggest rise in 27 years. Interest rates climbed from 1.25% to a staggering 1.75%. However, we are still yet to see further increases from hereon.
With finance companies’ costs of lending rising, they have no other option than to increase their own interest rates. In the past, when the market was secure, finance quotations would be valid indefinitely. But please now take our current climate into consideration when looking at previous finance quotations that you have been provided with as they might now be invalid. Therefore, any finance quote that you are provided with will be subject to the change of interest rates.
What should I do if I am looking to finance equipment now?
If you are looking to finance equipment now, we advise that you make these purchases now to lock in the best possible price before interest rates soar any further.
It should bring you peace of mind that interest rates are fixed through your finance agreement with us. Therefore, you have the reassurance of knowing that your repayments will not change once the agreement has been activated.
However please note that some finance companies will give pricing at time of acceptance whilst others only give 48 hours’ notice before a price increase is put in place.
Contact Us
If you have any questions on how our current financial climate might affect your buying plans, please don’t hesitate to get in touch. Give us a call on 01494 611 456. Alternatively, send an email to hello@westwon.dental and a member of our friendly team will get back to you.
